Brussels (Brussels Morning Newspaper) -The Brussels stock exchange has applauded hammock investing, a kind of passive investment that involves indexes and trackers that have been more recently identified among investors, especially the youth.
Benoît van den Hove, CEO of Euronext Brussels, in an interview with Belga, stated:
“We are pleased that more and more people, including young people, are investing in this way”
This adjustment is in line with the progress in adopting old-school investment models or strategies, going against earlier attitudes that the new generation investors only invested in cryptocurrencies.
Van den Hove noted:
“Until a year ago, everyone told us that young people only invest in cryptocurrencies and are not interested in global stock market indices or shares, but now you really see that switch.”
Euronext Brussels welcomes the rise of hammock investing, a passive investment strategy focusing on index funds and trackers, particularly among younger investors. On this score, CEO Benoît van den Hove has something positive to report, declaring that there has been a growing trend from what was once the impression that the younger generation of people was only interested in cryptocurrencies. The stock exchange wants this form of investing to be adopted because it prepares investors to move to more involved stock picking.
The year 2024 presented a mixed performance for Euronext Brussels, with the Bel20 index achieving an impressive annual gain of around 15%, largely driven by the remarkable performance of pharmaceutical company UCB, which saw a 140% increase in its stock value. However, the BelMid and BelSmall indices faced slight losses during the same period. Despite a decrease in total trading volume to €317 million per day, the BelSmall index marked its first increase in years, rising from €2 million to €2.8 million per day.
Crucially, there were no IPOs on the Brussels Exchange in the last year, while Stegen, the head of listings for the Benelux for Euronext Brussels, admitted that there are fewer IPOs around the world. Nonetheless, optimism for 2025 is growing as Van den Hove describes 2024 as “the end of a cycle” and anticipates improved conditions for capital operations.
Besides expected IPOs of companies such as Galapagos and I-care, Van den Hove has called federal negotiators to reopen government stakes in SOEs like Belfius. He underlined that it may not always be wise to retain a 100% stake and said that such portions could be sold to regularise state coffers. Additionally, he discouraged the use of large levels of capital gains taxes that seek to send signals to private sources to stop funding SMEs listed in the exchange.
How Are Recent Market Trends Affecting Euronext Brussels?
Hammock investing is a concept that is quite different from what young people used to term as trading in the financial markets. Previously, short-term investments and high-risk ones, such as cryptocurrencies, were in trend; on the contrary, at the present time, index fund investors are becoming conscious of risk management. It also allows an individual to accumulate his or her investment systematically until risks spread to different types of assets.
As one of the leading financial markets in Belgium, Euronext Brussels bears the main responsibility for investment management processes in the country as well as gross domestic product formation. Together with the Amsterdam, Lisbon, Milan, Oslo, and Paris exchanges, Euronext Brussels presented itself as a preferred place for attracting capital both for national and international companies. The interests of the exchange can be observed in such programs that are aimed at increasing the level of knowledge of the population and increasing the share of the population engaged in trading operations in the financial market.
Also, the shift towards sustainable investment and implementing ESG standards within the last several years influenced investors’ considerations. Euronext Brussels has also stepped up to the challenge by providing a favourable environment for sustainable finance projects and ensuring that the companies delivering their securities meet recognised ESG reporting policies. Over time, more and more investors have repositioned, and so has the global economy. More significantly, Euronext Brussels stands ready to support both conventional and unconventional methods of fundraising.
Therefore, as hammock investing gains popularity in the market and passive approaches sell young generations, Euronext Brussels is ready for this shift and ready to address the challenges of the breakdown of market movements and changes in legislation. The prospects are bright for both investors and firms who seek to grow within the Belgian context of the financial sector.
